Lifestyle retailer has ambitious expansion plans for east Africa

One of east Africa’s largest clothing and household goods retailers, Deacons Kenya Limited, is planning to increase its footprint and diversify its brands across the region.

Deacons' Truworths outlet at the Yaya Centre, Nairobi

Deacons' Truworths outlet at the Yaya Centre, Nairobi

The company recently announced its intention to raise KSh.800 million (US$9.9 million) in fresh capital through a public offer.

According to Reuters, Deacons has franchises for a number of South African brands, including Mr Price, Truworths, Woolworths, Identity and Sheet Street. It has also created two of its own brands, 4u2 and Angelo.

In addition, the group recently acquired a franchise to sell the Adidas brand in Kenya from Fashion Brands, a company that owned the local franchise of United Colours of Benetton, Business Daily reported.

The company currently has 23 retail outlets in Kenya, Uganda and Tanzania. Imara Africa Securities said that Deacons wants to increase its number of stores to 50 over the next five years.

“We have ambitious plans for growth at Deacons, this is buoyed by an emerging middle class in Kenya and the region. We expect to significantly increase the number of stores across the region in the next five years and at the same time will continue to pursue new opportunities to expand and diversify our portfolio of brands to ensure our customers are kept happy, satisfied and engaged,” explained the company’s CEO Muchiri Wahome.

Commenting on the public offer, Deacons chairman Peter Njoka said: “We are delighted that the Capital Markets Authority (CMA) has approved our application, which gives our existing and potential shareholders the opportunity to invest in the company, as we move to the next level of implementing our strategic business plan.”

He added that it is Deacons’ intention to list the company’s shares on the Nairobi Stock Exchange at a later date.

To aid its expansion strategy, Deacons recently invested Ksh.36 million ($448,000) in a new Enterprise Resource Planning (ERP) system.

According to a company statement, the ERP solution is “aimed at linking different business processes by correlating information from various functions and using it to run the whole business more smoothly”.

Muchiri said the system will even more crucially help in effectively managing inventory levels, warehouse space and processes – an important element of Deacons whose business involves storage and movement of goods across its 23 stores in east Africa.